As Devices Converge, Chip Vendors Girding For a Fight

The computing world is undergoing a significant shift as consumers and businesses access and store more of their information in web-based applications, get their software delivered as a service or even download music and movies to their PCs on demand. This trend is enabled by better access to wireless networks, be they Wi-Fi hotspots at a local Starbucks or cellular networks that work in the middle of a corn field.

Some people refer to this shift as everything moving to the cloud, but whatever you call it, the trend of digitizing music, presentations and even books has made information portable and ephemeral enough that it’s rocking the world of chipmakers, device vendors and even server makers, whose products ground the cloud. In this article, I’ll talk about the effects of the cloud on the consumer and corporate client devices.

The Changing World of Devices

At the consumer and business user level, netbooks, smartphones and PCs are adapting to this new paradigm in several ways — allowing users to customize their gadgets to fit different needs. For example, a smartphone is for making phone calls, but thanks to the ease of web surfing brought on by Apple’s iPhone or even the Opera browser, such phones are getting bigger screens and more powerful application processors so they can handle nicer graphics and multiple applications.

Notebooks are becoming smaller and less power hungry — morphing into netbooks with smaller form factors and better battery life. Between the smartphone and the notebooks is another family of gadget, the mobile Internet device, or MID. In many ways, the MID is still undefined. But netbooks were one of the fastest-growing sellers in the last year, and ABI Research expects 35 million to be sold in 2009. That’s still just a fraction of the PC market, however.

With the cloud fueling the growth in mobile devices, PC makers are trying two different strategies to combat erosion on the consumer and corporate front. The are making larger, more powerful workstations — sometimes called desktop supercomputers — and smaller, graphics-focused devices that can act as media servers.

This battle for the brains of these highly portable devices is a battle between these vendors, but it’s also a battle of different chip architectures: Intel’s x86 and the IP cores licensed by ARM. Intel has the software advantage — most business software is written for x86 chips rather than for ARM cores. ARM, however, has a power advantage. Its chips are built to work on battery-powered devices that people expect to run for a full day or longer between charges. Intel has lowered its power consumption considerably with Atom, but it still sucks down 2-3 times as much energy as most ARM-based chips.

For the end user, digitized content accessed over the cloud enables smaller, more portable devices. It’s also changing the market for the traditional desktop PCs, since mobile devices are becoming more competitive with desktops. As these devices go mobile, Intel has a chance to move downstream into less-powerful processors and chipmakers using the ARM architecture may be able to move upstream with their low-power application processors.